Author's Note: This article is
third in a series by Tax Expert Wayne Davies on advantages of incorporating your small business or self-employment activity. Article #1: It Can Happen To You: Why Any Sole Proprietorship Is A Risky Business http://www.YouSaveOnTaxes.com/happen-to-you.txt
Article #2: How To Avoid Double The Trouble: Why A Partnership Can Be Twice As Dangerous http://www.YouSaveOnTaxes.com/double-the-trouble.txt
Article #3: Three's Company: How To Move From Unlimited Liability to Limited Liability http://www.YouSaveOnTaxes.com hree-is-company.txt
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For small business owner or self-employed person, both Sole Proprietorship and General Partnership put you in world of Unlimited Liability.
All your personal assets are at risk. A business-related accident or lawsuit could literally wipe you out.
How do you move from world of Unlimited Liability to Limited Liability? By forming a "C" Corporation, an "S" Corporation, or a Limited Liability Company (LLC).
For now, I'm leaving Limited Partnership out of this discussion. I'm assuming that you want a say in day-to-day management of your business.
If so, then both General Partnership and Limited Partnership are not a good Choice of Entity for you.
Why is that? Because if your business is a General Partnership, then you automatically have unlimited liability. And if your business is a Limited Partnership and you want management control, then you're going to have to be General Partner, and again, you'll have unlimited liability.
